Question

Liquidity ratios includes which two types of ratios?

Options

• Current ratios

• Liquid ratio

• Both Current and Liquid ratio

• None of the above

Answer 1

Both Current and Liquid ratio.

Explanation:

Liquidity ratios are determined to provide information on a company's short-term solvency, or its capacity to satisfy present obligations. The amounts of current assets and current liabilities in the balance sheet are used to examine these. Bank overdrafts, creditors, outstanding bills, bills payable, and income received in advance are all examples. Current and Liquid Ratio are the two ratios mentioned in this category.